Wall Street’s fear gauge hits highest level since June

Wall Street’s fear gauge hits highest level since June


Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., January 31, 2018.

Brendan McDermid | Reuters

A measure of fear in stocks just hit the highest level in three months amid mounting worries over rising rates, a possible currency calamity and a recession.

The Cboe Volatility Index, known as the VIX, jumped nearly 3 points to 32.88 on Monday, hitting its highest level since mid-June when the stock market last reached its bear bottom.

The VIX, which tracks the 30-day implied volatility of the S&P 500, hasn’t closed above 30 since June 16. The index looks at prices of options on the S&P 500 to track the level of fear on Wall Street.

The jump latest jump in the VIX also comes in the midst of currency market turmoil and the dollar continuing to climb to a 20-year-high. Investors started dumping risk assets as the Federal Reserve vowed to tame inflation with aggressive rate hikes, risking an economic slowdown.

Options Action: Reading the VIX

The Dow Jones Industrial Average on Friday notched a new low for the year and closed below 30,000 for the first time since June 17. The S&P 500 capped its fifth negative week in six, falling 4.65% last week.

The Dow and the S&P 500 fell again in morning trading Monday.

With investor fears now reaching extreme levels occurring during the last bear market bottom, it could also be a sign that stocks are nearing a turning point this time.



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